Avtovaz sees cooling in demand on car market owing to Central Bank hiking key rate

MOSCOW. Dec 1 (Interfax) - The Central Bank of Russia hiking the key rate to 15% has cooled demand on the Russian car market, thus Avtovaz sold slightly fewer Lada cars in November than it had expected two weeks ago, company president Maxim Sokolov told reporters on Thursday on the sidelines of the "Russia" forum and exhibition.

As reported, Avtovaz sold 283,464 Ladas in Russia in January-October 2023, nearly double the figure in the same period in 2022.

"We had a record October, selling nearly 41,000 cars; and, in principle, we have assumed that the entire auto market would grow by the New Year. However, even now the cooling of demand, at which the Central Bank was aiming by deciding to raise the key rate, is reaching the car market," Sokolov told the reporters.

Sokolov in mid-November said that the company at that time had expected to sell 37,500 Lada cars in Russia in November. However, it became clear after two weeks that the result would be slightly lower, Sokolov said the previous day. "November is not over yet, but our forecast is that 35,000-36,000 new Lada cars will be sold this month," he said.

Sokolov emphasized at the same time that Avtovaz's production plans for the year are not suffering from the slight decrease in the sales plan within the month. "The conveyor, as I have already said, is operating at full capacity; and we are absolutely confident that all Avtovaz-produced cars will find their buyers," he said.

Sokolov said that despite the current restrictions, Avtovaz was now fully manufacturing the entire model range, developing modifications, and restoring options. "So, just the other day, the heated steering wheel option was returned to the Lada Vesta. The sanctions are certainly affecting our operations. However, this does not affect the productivity of the conveyors, nor the plans for launching new models," he said.

Sokolov two weeks ago reported that Avtovaz had to revise its production plan for the year, reducing expectations by about 10% from the previously announced 400,000 vehicles. The reason was the U.S. sanctions in September. "As soon as it became obvious that we were included in the Specially Designated Nationals and Blocked Persons (SDN) List, it became clear that the passage of some supply chains would be difficult and, of course, the figure [400,000] would be adjusted in such conditions," Sokolov told reporters in mid-November.